MNI China Daily Summary: Thursday, September 26
EXCLUSIVE: China’s property market will remain weak over the September-October traditional peak season as new stimulus measures take time to work through the economy, while consumer confidence continues to struggle, advisors and analysts told MNI.
POLICY: Beijing will step up efforts to meet its 5% annual growth target by launching additional measures and improving policy effectiveness, according to the details of Thursday's Politburo meeting reported by the People’s Daily.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY292 billion 14-day reverse repos, with the rate at 1.85%. The operation led to a net drain of CNY231.6 billion after offsetting maturities of CNY523.6 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.8464% on Thursday from 1.8748% previously, Wind Information showed. The overnight repo average decreased to 1.6086% from the previous 1.6336%.
YUAN: The currency strengthened to 7.0200 against the dollar, from 7.0218 at Wednesday's close. The PBOC set the dollar-yuan central parity rate higher at 7.0354 on Thursday, compared with 7.0202 set on Wednesday. The fixing was estimated at 7.0344 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.0630%, up from Wednesday's close of 2.0350%, according to Wind Information.
STOCKS: The Shanghai Composite Index gained 3.61% to 3,000.95, while the CSI300 index rallied 4.23% to 3,545.32. The Hang Seng Index rose 4.16% to 19,924.58.
FROM THE PRESS: The PBOC can deal with potentialinterest rate fluctuations and keep the yuan basically stable at a reasonable and balanced level, Financial News, a PBOC-run newspaper, said in a front-page article. Major economies’ rate cuts have significantly eased external pressure on the yuan in the near term, while a solid foundation for the currency to remain stable in the mid-to-long-term exists, the newspaper noted. Market participants must assess risk correctly and not bet on the direction of the exchange rate, the newspaper said.
China will prioritise high-quality and full employment goals within economic and social development, according to a guideline released by the State Council, the first central-government document issued on the topic, Shanghai Securities News reported. Authorities will increase employment by better coordinating policies on fiscal, monetary, industrial, price, and other factors, the document said.
China’s green credit and bond market has reached CNY35 trillion, becoming the worlds largest and has strong potential for future expansion, noted Ma Jun, director at the Green Finance Committee and former Chief Economist at the Research Bureau of the People’s Bank of China. Ma highlighted many high-carbon emission companies risked bankruptcy in future if they did not transform correctly, leading to increased unemployment and bad debts. Transformation finance should promote high-emission enterprises such as steel, cement, and nonferrous metals to accelerate their green and low-carbon transformation, Ma added.